With the obstacles that face new startup businesses, it’s a wonder that any make it past the first year. In fact, recent statistics show that up to 90% of startups actually fail within their first 12 months.
There are many reasons why new businesses struggle including:
- trading in a very competitive market
- inexperienced management
- ineffective marketing
- expanding too quickly
- staffing issues.
However, undoubtedly the most common reason a startup begins to struggle is lack of money. Cashflow difficulties can arise for a number of reasons:
- insufficient initial funds
- poor cashflow management due to lack of experience, time or resources
- unexpected bills
- increasing costs (e.g. due to Brexit)
- lack of sales.
Cashflow problems can cause real problems for startup companies and they should not be ignored.
What are your options if your business is failing?
If your business is having serious cashflow issues, you should act now.
Most professional advisers will offer you free initial advice. You should take advantage of this – you have nothing to lose.
(For free advice from us, just call 0161 907 4044 or email [email protected])
If you want to avoid liquidation and believe you could repay the company’s debts if you had some breathing space, then a Company Voluntary Arrangement (CVA) could be the best option for you.
A CVA is an agreement with your creditors (i.e. the people you owe the money to) where you pay an agreed amount each month over a set period of time. In many cases, some of the debt is written off. A CVA can last up to 5 years and is prepared in such a way that it enables you to repay your debts in a manageable way over that period.
In many cases, the better solution is to close down the business with a Creditors’ Voluntary Liquidation (CVL). A CVL can provide you with a speedy way to meet your legal obligations to all your creditors – thereby enabling you to move on and have a fresh start.
What should you do now?
Contact Clarke Bell and we will give you free advice on what your best option is.
We have a wealth of experience and expertise in helping business owners decide how they should deal with their cashflow problems.
Contact us now on 0161 907 4044 or [email protected]